Does Filing a Consumer Proposal Affect My Mortgage Renewal?

Does Filing a Consumer Proposal Affect My Mortgage Renewal?

Will My Mortgage Renewal Be Impacted By a Consumer Proposal?

A common query that arises during financial discussions revolves around the impact of a consumer proposal on mortgage renewal. The answer to this question is crucial in understanding the financial trajectory of an individual who has taken this step.

What Is A Consumer Proposal?

Before diving into the details, it’s essential to understand what a consumer proposal is. A consumer proposal is a formal, legally binding process conducted under the Bankruptcy and Insolvency Act. It allows overburdened debtors to make a proposal to their creditors to modify their payment terms or reduce the amount of their debt.

The Connection: Consumer Proposal and Mortgage Renewal

The process of renewing a mortgage is typically automatic and isn’t influenced by the filing of a consumer proposal.

Staying With Your Existing Lender

If you remain with your current lender, the mortgage renewal process is relatively straightforward. This situation does not usually necessitate a credit application. However, issues may arise if you reject the automatic renewal your existing lender offers.

Venturing Into New Financing Options

If you aim to secure financing from a different mortgage company, you’ll have to complete a new credit application. Here’s where your consumer proposal can create a hurdle. The negative mark on your credit history due to the consumer proposal can potentially hamper your approval chances.

The Mortgage Renewal Scenario in Personal Bankruptcy

The question of mortgage renewal also comes into play during personal bankruptcy. Find out more about this here.

Real-Life Cases: Consumer Proposal and Home Ownership

Not too long ago, a couple under massive debt, yet owning a house, sought help. You can learn how they were guided through the process here.

The Bottom Line

As long as you remain with your existing mortgage lender, you should encounter no issues. In over a decade of working in the insolvency industry, it’s rare to see someone in a consumer proposal being unable to renew their mortgage.

Meeting with a Licensed Trustee

You will be meeting with a licensed trustee in bankruptcy at no charge when you consult us. Learn more about this here.

Our Presence

We have offices across South Western Ontario, offering flexible hours to accommodate your schedule so that you don’t have to miss work.

Fresh Financial Start

Let us help you embark on a fresh financial start!


The question, “Does filing a consumer proposal affect my mortgage renewal?”, has a relatively straightforward answer. As long as you stick with your existing lender, your mortgage renewal should proceed without a hitch. However, venturing into new financing options might be challenging due to the negative mark on your credit history from the consumer proposal. It’s advisable to consult with a licensed trustee to understand your unique circumstances better.

Remember, there’s always a way to secure a fresh financial start!

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.